Zimbabwe interest rates up to 800pc

By Byron Dziva In Harare

12:01AM BST 02 Oct 2007

Zimbabwe has raised interest rates from 650 per cent to 800 per cent, a stark illustration of the country falling further into economic crisis.

Even in the bizarre financial world created by President Robert Mugabe's policies, Gideon Gono, the central bank governor, admitted that he "never dreamt that we would get to these levels of inflation" but vowed to "not be deterred".

"The outlook in the short term is that our number one enemy [inflation] remains very angry and formidable," he added. The country has 6,600 per cent inflation.

The announcement came as Zimbabwe's teachers went on strike to demand a 500 per cent pay increase.

But at free market exchange rates, this amounts to about £3.50 a week.